Pa. taxpayers foot growing bill for gas subsidies

ASSOCIATED PRESS

November 4, 2013 12:01 AM

ASSOCIATED PRESS

November 4, 2013 12:01 AM

HARRISBURG -- The discovery five years ago that the Marcellus Shale, the nation's largest natural gas reservoir, could spew big profits and cheap, homegrown energy has, in turn, spurred gas-friendly state officials to run up a growing taxpayer-funded tab to encourage the use of the hydrocarbons.

Bills pending in the Republican-controlled Legislature could deliver hundreds of millions of dollars in subsidies over a decade -- possibly approaching $1 billion -- and that's in addition to the expanding number of checks being written by Gov. Tom Corbett.

With the assent of lawmakers, Corbett, a Republican who says the industry has the potential to re-industrialize Pennsylvania, has tapped four pots of money for more than $30 million for natural gas projects.

On top of that, lawmakers in 2012 approved what could become the state's biggest taxpayer-paid economic development incentive ever -- possibly in excess of $1 billion over 25 years -- to entice the construction of a multibillion-dollar petrochemical refinery to convert natural gas liquids into ethylene for the plastics and chemicals industries. Netherlands-based oil and gas giant Royal Dutch Shell PLC is considering it.

Patrick Henderson, a deputy chief of staff for Corbett who spearheads the administration's energy policy, couldn't say how much money the administration ultimately would be willing to spend to encourage natural gas use.

Some of the subsidies were drawn from economic development incentive money that is designed to spur hiring, and it was coincidental that natural gas was a key aspect of the project, Henderson said.

Otherwise, Henderson said, the state so far has made a "relatively modest investment of dollars" for compressed natural gas vehicles and fueling stations, primarily to convert diesel-powered bus and truck fleets.

The argument for Pennsylvania's rising natural gas vehicle subsidies is that the money boosts the local economy by favoring a domestic industry and diversifies the nation's fuel sources.

Other states also offer an array of subsidies that encourage natural gas use, but a comprehensive tally does not seem to exist.

In Pennsylvania, tens of millions more dollars, at least, are available for Corbett to commit to natural gas projects if he desires.